NOTE 7 – Costs Associated with Exit and Restructuring Activities

Costs associated with exit and restructuring activities are recorded in the Condensed Consolidated Statement of Earnings as follows: restructuring related charges are recorded as a component of Cost of Goods Sold, and restructuring and impairment charges are reported on a separate line and included in Operating Earnings.

Total restructuring, impairment and restructuring related charges were as follows:


	Three Months Ended
	September 27,		September 28,
($ in thousands)	2015		2014
Restructuring related charges	$	152	$	494
Restructuring and impairment charges		2,373		1,570
Total restructuring, impairment, and restructuring related charges	$	2,525	$	2,064


	Nine Months Ended
	September 27,		September 28,
($ in thousands)	2015		2014
Restructuring related charges	$	444	$	1,404
Restructuring and impairment charges		5,229		4,806
Total restructuring, impairment, and restructuring related charges	$	5,673	$	6,210

During April 2014, CTS announced plans to restructure its operations and consolidate its Canadian operations into other existing CTS facilities as part of CTS’ overall plan to simplify its business model and rationalize its global footprint (“April 2014 Plan”).

During the second quarter of 2015, CTS management revised the April 2014 Plan. The amendment added an additional $4,250,000 in planned costs. Additional administrative and legal costs are estimated to account for $1,300,000 of additional restructuring and impairment charges due to the extension of the timing of the plant shutdown. The remaining $2,950,000 in restructuring related charges are for additional costs related to equipment relocation, training, travel and shipping costs to facilitate an effective transition. The above actions are expected to be substantially complete in 2015.

These restructuring actions will result in the elimination of approximately 120 positions. These actions are expected to be completed in 2015. The following table displays the planned restructuring and restructuring-related charges associated with the April 2014 Plan, as well as a summary of the actual costs incurred through September 27, 2015:


			Actual costs
	Planned		incurred through
($ in thousands) April 2014 Plan	Costs		September 27, 2015
Inventory write-down	$	850	$	—
Equipment relocation		1,800		258
Other charges		1,400		111
Restructuring related charges, included in cost of goods sold	$	4,050	$	369

Workforce reduction	$	4,200	$	4,262
Asset impairment charge		—		—
Other charges, including pension termination costs		1,700		3,110
Restructuring and impairment charges	$	5,900	$	7,372

Total restructuring, impairment and restructuring related charges	$	9,950	$	7,741

Under the April 2014 Plan, total restructuring, impairment and restructuring related charges were as follows:


	Three Months Ended
	September 27,		September 28,
($ in thousands)	2015		2014
Restructuring related charges	$	152	$	—
Restructuring and impairment charges		2,025		575
Total restructuring, impairment, and restructuring related charges	$	2,177	$	575


	Nine Months Ended
	September 27,		September 28,
($ in thousands)	2015		2014
Restructuring related charges	$	369	$	—
Restructuring and impairment charges		3,902		2,980
Total restructuring, impairment, and restructuring related charges	$	4,271	$	2,980

During June 2013, CTS announced a restructuring plan to simplify CTS’ global footprint by consolidating manufacturing facilities into existing locations (“June 2013 Plan”). The June 2013 Plan includes the consolidation of operations from the U.K. manufacturing facility into the Czech Republic facility, the Carol Stream, Illinois manufacturing facility into the Juarez, Mexico facility and to discontinue manufacturing at its Singapore facility. Certain Corporate functions were consolidated or eliminated as a result of the June 2013 Plan.

These restructuring actions will result in the elimination of approximately 350 positions. The above actions are expected to be completed in 2015.

During the fourth quarter of 2014, CTS management revised the June 2013 Plan. The amendment added an additional $4,000,000 in planned costs. Future settlement of the U.K. pension plan is estimated to account for $2,000,000 of the added cost. The remaining $2,000,000 in restructuring and impairment charges are for severance costs and will result in the elimination of approximately 130 additional positions. The positions eliminated will be spread globally throughout CTS businesses. The above actions are expected to be substantially complete in 2015.

The following table displays the planned restructuring and restructuring-related charges associated with the realignment, as well as a summary of the actual costs incurred through September 27, 2015:


	Planned		Actual costs incurred through
($ in thousands) June 2013 Plan	Costs		September 27, 2015
Inventory write-down	$	800	$	1,143
Equipment relocation		900		1,792
Other charges		100		652
Restructuring-related charges, included in cost of goods sold	$	1,800	$	3,587

Workforce reduction	$	10,150	$	9,216
Asset impairment charge		3,000		4,139
Other charges, including pension termination costs		7,650		1,784
Restructuring and impairment charges	$	20,800	$	15,139

Total restructuring and restructuring-related charges	$	22,600	$	18,726

Under the June 2013 Plan, total restructuring, impairment and restructuring related charges incurred were as follows:


	Three Months Ended
	September 27,		September 28,
($ in thousands)	2015		2014
Restructuring related charges	$	—	$	494
Restructuring and impairment charges		348		995
Total restructuring, impairment, and restructuring related charges	$	348	$	1,489


	Nine Months Ended
	September 27,		September 28,
($ in thousands)	2015		2014
Restructuring related charges	$	75	$	1,404
Restructuring and impairment charges		1,327		1,826
Total restructuring, impairment, and restructuring related charges	$	1,402	$	3,230

The following table displays the restructuring reserve activity for the period ended September 27, 2015:


($ in thousands) June 2013 Plan and April 2014 Plan
Restructuring liability at January 1, 2015	$	3,904
Restructuring and restructuring-related charges, excluding asset impairments and write-offs		5,791
Cost paid		(7,351)
Restructuring liability at September 27, 2015	$	2,344